Malawi’s gross national income (GNI) per capita has declined by 15 percent in the past decade, a development that has affected the welfare of people, according to the World Bank.
GNI per capita is the dollar value of a country’s final income in a year divided by its population.
World Bank estimates from its 2020-21 Country Classifications by Income Level indicate that Malawi’s GNI per capita has fallen over a 10-year period from $450 (K333 000) in 2010 to $380 (K281 200), making Malawi a country with the lowest GNI per capita after Burundi, which has a GNI per capita of $280 (K207 200).
In contrast, Tanzania GNI per capital is at $1 080), Zimbabwe at $1 390, Zambia at $1 450 and South Africa at $6 040, showing that Malawi’s poverty is widespread.
In an interview on Tuesday, National Planning Commission managing director Thomas Chataghalala Munthali said the decline could be explained by the poor macroeconomic environment.
Said Munthali: “What is key is to look at the number of economic factors which have not been good until recently.
“If we sustain this, add more investments, follow priorities outlines in the Vision 2063 and the reforms, then we should be on track to attaining a middle-income status even after 15 years.”
The World Bank assigns the world’s economies to four income groups—low, lower-middle, upper-middle, and high-income countries.
The classifications are updated each year on July 1 and are based on GNI per capita in current US dollar of the previous year, but a change in classification is determined by factors such as economic growth, inflation, exchange rates and population growth.
On the other hand, the Malawi Growth and Development Strategy (MGDS) III projects that Malawi will double her per capita income—average income earned per person in a given area—in the next five years from the current level of $380 (K277 billion) with the scaling up of the investment.
Betchani Tchereni, associate professor of economics at The Polytechnic—a constituent college of the Universityh of Malawi—said on Tuesday that low levels of average incomes implies that more people have gone down the poverty line, but the situation could worsen in the face of the Covid-19 pandemic.
He said: “This implies that we are still struggling with basic activities, meaning transforming into a middle-income economy will be hard.
“It will be hard for us to industrialise, hard to arrive at self-sufficiency, hard to attract foreign investors and hard to be competitive when we produce for industry.”
Following the Covid-19 pandemic, the International Food Policy Research Institute analysis shows that an estimated 1.1 million Malawians have fallen into the poverty trap two months after authorities effected social distancing measures to contain the pandemic.
This has pushed the poverty rate by 5.8 percentage points to 56.3 percent from the initial 50.5 percent with the urban and rural rate increasing to 62.3 percent and 22.8 percent, from 56.5 percent and 17 percent, respectively.